BIRMINGHAM, Ala., Oct. 29, 2025 /PRNewswire/ -- Encompass Health Corporation (NYSE:EHC), the largest owner and operator of inpatient rehabilitation hospitals in the United States, today reported its results of operations for the third quarter ended September 30, 2025.
Summary results
Growth
Q3 2025
Q3 2024
Dollars
Percent
(In Millions, Except Per Share Data)
Net operating revenue
$ 1,477.5
$ 1,351.0
$ 126.5
9.4 %
Income from continuing operations attributable to Encompass Health per diluted share
1.24
1.07
0.17
15.9 %
Adjusted earnings per share
1.23
1.03
0.20
19.4 %
Cash flows provided by operating activities
270.8
267.8
3.0
1.1 %
Adjusted EBITDA
300.1
269.3
30.8
11.4 %
Adjusted free cash flow
174.2
189.7
(15.5)
(8.2) %
(Actual Amounts)
Discharges
65,839
62,715
5.0 %
Same-store discharge growth
2.9 %
Net patient revenue per discharge
$ 21,679
$ 20,987
3.3 %
See attached supplemental information for calculations of non-GAAP measures and reconciliations to their most comparable GAAP measure.
"During the quarter, we further increased our capacity to serve patients in need of inpatient rehabilitation care by opening three new hospitals and adding 39 beds to existing hospitals," said President and Chief Executive Officer Mark Tarr. "Our new hospitals include our first in Connecticut, a 40-bed hospital in Danbury; a 50-bed hospital in Daytona Beach, Florida; and a 50-bed hospital in Wildwood, Florida (The Villages). Our value proposition and operating strategy continue to be validated and we remain highly optimistic about the long-term prospects of our business."
Tarr added, "Encompass Health was recently named 'America's Most Awarded Leader in Inpatient Rehabilitation' by Newsweek and Statista for the sixth consecutive year. Our consistent presence on this prestigious list reflects our long-standing commitment to delivering high-quality patient care and excellent outcomes."
2025 Guidance
The Company increased its full-year guidance as follows:
Full-Year 2025 Guidance
Previous Guidance
Updated Guidance
(In Millions, Except Per Share Data)
Net operating revenue
$5,880 to $5,980
$5,905 to $5,955
Adjusted EBITDA
$1,220 to $1,250
$1,235 to $1,255
Adjusted earnings per share from continuing operationsattributable to Encompass Health
$5.12 to $5.34
$5.22 to $5.37
For considerations regarding the Company's 2025 guidance, see the supplemental information posted on the Company's website at http://investor.encompasshealth.com. See also the "Other information" section below for an explanation of why the Company does not provide guidance for comparable GAAP measures for Adjusted EBITDA and adjusted earnings per share.
Earnings conference call and webcast
The Company will host an investor conference call at 10:00 a.m. Eastern Time on Thursday, October 30, 2025 to discuss its results for the third quarter of 2025. For reference during the call, the Company will post certain supplemental information at http://investor.encompasshealth.com.
The conference call may be accessed by dialing 800 245-3047 and giving the conference ID EHCQ325. International callers should dial 203 518-9765 and give the same conference ID. Please call approximately ten minutes before the start of the call to ensure you are connected. The conference call will also be webcast live and will be available for on-line replay at http://investor.encompasshealth.com by clicking on an available link.
About Encompass Health
Encompass Health (NYSE:EHC) is the largest owner and operator of inpatient rehabilitation hospitals in the United States. With a national footprint that includes 171 hospitals in 39 states and Puerto Rico, the Company provides high-quality, compassionate rehabilitative care for patients recovering from a major injury or illness, using advanced technology and innovative treatments to maximize recovery. Encompass Health is named America's Most Awarded Leader in Inpatient Rehabilitation by Newsweek and Statista and is ranked among Fortune's World's Most Admired Companies™ and Forbes' Most Trusted Companies in America.1 For more information, visit encompasshealth.com, or follow us on our newsroom, X, Instagram and Facebook.
1 Fortune © 2025 Fortune Media IP Limited. All rights reserved. Fortune® is a registered trademark and Fortune World's Most Admired Companies™ is a trademark of Fortune Media IP Limited and are used under license. Fortune and Fortune Media IP Limited are not affiliated with, and do not endorse products or services of, Encompass Health. Forbes © 2024 Forbes Media LLC. All rights reserved. Used under license.
Other information
The information in this press release is summarized and should be read in conjunction with the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2025 (the "September 2025 Form 10-Q"), when filed, as well as the Company's Current Report on Form 8-K filed on October 29, 2025 (the "Q3 Earnings Form 8-K"), to which this press release is attached as Exhibit 99.1. In addition, the Company will post supplemental information today on its website at http://investor.encompasshealth.com for reference during its October 30, 2025 earnings call.
The financial data contained in the press release and supplemental information include non-GAAP financial measures, including the Company's adjusted earnings per share, leverage ratio, Adjusted EBITDA, and adjusted free cash flow. Reconciliations to their most comparable GAAP measure, except with regard to non-GAAP guidance, are included below or in the Q3 Earnings Form 8-K. Readers are encouraged to review the "Note Regarding Presentation of Non-GAAP Financial Measures" included in the Q3 Earnings Form 8-K which provides further explanation and disclosure regarding the Company's use of these non-GAAP financial measures.
Excluding net operating revenues, the Company does not provide guidance on a GAAP basis because it is unable to predict, with reasonable certainty, the future impact of items that are deemed to be outside the control of the Company or otherwise not indicative of its ongoing operating performance. Such items include government, class action, and related settlements; professional fees—accounting, tax, and legal; mark-to-market adjustments for stock appreciation rights; gains or losses related to hedging instruments; loss on early extinguishment of debt; adjustments to its income tax provision (such as valuation allowance adjustments and settlements of income tax claims); items related to corporate and facility restructurings; and certain other items the Company believes to be not indicative of its ongoing operations. These items cannot be reasonably predicted and will depend on several factors, including industry and market conditions, and could be material to the Company's results computed in accordance with GAAP.
However, the following reasonably estimable GAAP measures for 2025 would be included in a reconciliation for Adjusted EBITDA if the other reconciling GAAP measures could be reasonably predicted:
Interest expense and amortization of debt discounts and fees - approximately $125 million
Amortization of debt-related items - approximately $10 million
The Q3 Earnings Form 8-K and, when filed, the September 2025 Form 10-Q can be found on the Company's website at http://investor.encompasshealth.com and the SEC's website at www.sec.gov.
Encompass Health Corporation and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
Three Months Ended September 30,
Nine Months EndedSeptember 30,
2025
2024
2025
2024
(In Millions, Except Per Share Data)
Net operating revenues
$ 1,477.5
$ 1,351.0
$ 4,390.6
$ 3,968.2
Operating expenses:
Salaries and benefits
784.8
732.1
2,314.8
2,144.2
Other operating expenses
231.1
202.4
662.4
596.2
Occupancy costs
14.9
14.4
44.5
42.6
Supplies
64.6
60.6
189.9
176.7
General and administrative expenses
56.1
54.0
167.8
154.7
Depreciation and amortization
82.4
78.4
241.5
221.6
Total operating expenses
1,233.9
1,141.9
3,620.9
3,336.0
Loss on early extinguishment of debt
—
0.4
—
0.4
Interest expense and amortization of debt discounts and fees
30.8
34.9
93.0
104.4
Other income
(5.9)
(9.3)
(15.1)
(18.0)
Equity in net income of nonconsolidated affiliates
(1.2)
(0.7)
(3.5)
(2.8)
Income from continuing operations before income tax expense
219.9
183.8
695.3
548.2
Provision for income tax expense
44.9
36.0
137.5
112.6
Income from continuing operations
175.0
147.8
557.8
435.6
Loss from discontinued operations, net of tax
(0.4)
(0.7)
(1.8)
(3.2)
Net income
174.6
147.1
556.0
432.4
Less: Net income attributable to noncontrolling interests
(48.1)
(38.9)
(135.9)
(97.6)
Net income attributable to Encompass Health
$ 126.5
$ 108.2
$ 420.1
$ 334.8
Weighted average common shares outstanding:
Basic
100.5
99.9
100.5
99.9
Diluted
102.3
102.1
102.3
102.2
Earnings per common share:
Basic earnings per share attributable to EncompassHealth common shareholders:
Continuing operations
$ 1.26
$ 1.09
$ 4.19
$ 3.36
Discontinued operations
—
(0.01)
(0.02)
(0.03)
Net income
$ 1.26
$ 1.08
$ 4.17
$ 3.33
Diluted earnings per share attributable to EncompassHealth common shareholders:
Continuing operations
$ 1.24
$ 1.07
$ 4.13
$ 3.31
Discontinued operations
—
(0.01)
(0.02)
(0.03)
Net income
$ 1.24
$ 1.06
$ 4.11
$ 3.28
Amounts attributable to Encompass Health common shareholders:
Income from continuing operations
$ 126.9
$ 108.9
$ 421.9
$ 338.0
Loss from discontinued operations, net of tax
(0.4)
(0.7)
(1.8)
(3.2)
Net income attributable to Encompass Health
$ 126.5
$ 108.2
$ 420.1
$ 334.8
Encompass Health Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)
September 30, 2025
December 31, 2024
(In Millions)
Assets
Current assets:
Cash and cash equivalents
$ 48.7
$ 85.4
Restricted cash
45.0
37.7
Accounts receivable
610.8
598.8
Other current assets
165.3
165.0
Total current assets
869.8
886.9
Property and equipment, net
3,925.5
3,643.1
Operating lease right-of-use assets
218.1
203.7
Goodwill
1,303.0
1,284.0
Intangible assets, net
291.9
297.8
Other long-term assets
257.4
219.2
Total assets
$ 6,865.7
$ 6,534.7
Liabilities and Shareholders' Equity
Current liabilities:
Current portion of long-term debt
$ 39.0
$ 138.6
Current operating lease liabilities
25.9
26.3
Accounts payable
138.4
171.0
Accrued expenses and other current liabilities
558.7
505.1
Total current liabilities
762.0
841.0
Long-term debt, net of current portion
2,393.9
2,359.2
Long-term operating lease liabilities
